Thrift Office's Eager Terminator

By LESLIE WAYNE

Published: January 21, 1992

In the mire of the savings and loan mess, T. Timothy Ryan Jr., the nation's top savings and loan regulator, has gotten remarkably little mud on his clothes.

The 46-year-old regulator has won so many political points for his swift seizure of faltering institutions and his crackdowns on industry scoundrels that his name has come up as a possibility for the next Comptroller of the Currency. He has successfully calmed a worried Congress, and his personal ties to President Bush and Treasury Secretary Nicholas F. Brady have brought him into the Administration's inner circle.

But many in the industry are less than happy with his reign, which began three years ago when Mr. Ryan became the first head of the newly created Office of Thrift Supervision. Some Say He Has Gone Too Far

As chief of the agency that decides which institutions will live and which will die, he has been so eager to close them down that his actions have sometimes bordered on the reckless, many industry executives and lawyers say. They contend that he has taken a dragnet approach, closing savings and loans that might have survived. And they say his attacks on savings industry lawyers have gone too far, raising questions about whether his agency has violated due process protections.

"There have been some very heavy-handed actions that have cost taxpayers money," said Douglas Faucette, a Washington lawyer who once worked for bank regulators and now represents industry clients. "Absolutely, many of these institutions might have survived. But in the political situation, they have to round up everyone."

To Mr. Ryan, such criticisms are compliments. "Some think we've been real aggressive," Mr. Ryan said in a telephone interview. "And we plead guilty to that."

Mr. Ryan sees himself as a warrior for the taxpayer. "We are the front-line troops," he said. "We're trying to make it through each battle. Most people here have been in combat positions for three years already." Cleaned Up Teamsters' Fund

This is not the first time that Mr. Ryan has faced combat. A labor lawyer, he is perhaps best known for having cleaned up the International Brotherhood of Teamsters' pension fund while serving as solicitor in the Reagan Adminstration's Labor Department. After taking on the teamsters, a task made even more delicate by the teamsters' support for Mr. Reagan's Presidential bid, confronting savings-and-loan crooks pales by comparison, some officials say.

But at his thrift agency confirmation hearings, his lack of experience in financial services, along with admissions of marijuana and concaine use in his youth, nearly derailed his nomination. Only after Secretary Brady made a concerted push did Mr. Ryan squeak by.

By his own admission, Mr. Ryan's credentials were weak. "My concern was that I wasn't qualified and it was a big job," he said. Those close to him say that he accepted only after a personal call from the President. Mr. Ryan's only comment is that he took the job "because the right guy asked me."

Since then, he has won high marks as a quick study of an arcane industry whose misdeeds are costing the Government tens of billions of dollars.

"Timothy Ryan is a born and bred Washington operator," said S. William Seidman, former chairman of the Federal Deposit Insurance Corporation. "And that proves more important than being an expert in financial services. He came to the job well prepared to work the Washington scene, less well prepared to work finance. But he's picked that up rapidly." 670 S.& L.'s Sold or Liquidated

During Mr. Ryan's tenure, his agency has ordered the liquidation or sale of some 670 savings and loans with assets of $350 billion, cut his agency's budget by about 10 percent a year and seen the capital of the surviving industry grow from under 1 percent to about 5 percent of assets.

An institution's capital is its cushion against losses. Those savings and loans determined to be unsound are transferred by the Office of Thrift Supervision to the Resolution Trust Corporation for sale or liquidation.

Currently, there are 2,148 savings and loans with $910 billion in assets under the thrift office's supervision. In the third quarter of 1991, 86 percent of these institutions were profitable, and the industry as a whole showed a net income of $271.8 million -- the third profitable quarter in a row.

But the numbers, rosy of late, mask an industry where the fate of many institutions remains uncertain and where, some say, a regulatory reign of terror pervades. "Everybody who's still alive is scared to death," said one former top Government enforcement lawyer now in private practice.

The argument some executives and lawyers offer is that in his zealousness, Mr. Ryan is closing institutions that if given a little latitude might survive. In doing so, they say, he is costing taxpayers extra money, since the Government has to cover the losses of these institutions -- immediately.

Charles John Koch, chief executive at the First Federal Savings Bank of Cleveland, said that while he was happy to have fewer competitors, Mr. Ryan's course imposed high costs on the public. 'Not in a Gambling Mood'